Startups, entrepreneurs and company owners need to be aware that credibility and substance is vital toward building and sustaining a business.
In light of the recent reports the European Union has added 10 jurisdictions to a draft tax haven blacklist, including disappointed nations such as: Bermuda, Oman and the UAE. What does economic substance mean? Why it is more important than ever for UAE companies? How much substance is enough for your Dubai company? We take a closer look at ways to ensure your company and bank account stay on the right side of the newly publicized substance tests and examine the issue of Economic Substance.
The “EU blacklist” refers to a list of non-cooperative jurisdictions for tax purpose. Jurisdictions are added to the “tax haven blacklist” if they are deemed to have shortfalls in their tax rules that could favor tax evasion. They are removed from the blacklist if they commit to reforms.
Consequently, EU countries can choose to apply certain defensive measures against the countries on the EU blacklist.
One of the principal reasons stated for the UAE’s inclusion on the tax haven list was for “not making sufficient progress in implementing economic substance regulations by the agreed deadline of “31 December 2018”.
Economic substance is an important issue for businesses and one that shows no signs of losing momentum. If you are concerned about the substance levels of your current UAE (GCC) entity or would like some corporate secretarial advice for a new Free Zone, ADGM, DIFC or mainland UAE company, contact us for a free consultation email [email protected] call +971 4 871 4142 or visit our website www.creationbc.com